Science Research Reporter 2(2):146-151, April 2012
ISSN: 2249-2321 (Print)
Production and profitability of flour confectionary products in different sizes of Bakery
Industry in Marathwada region (M. S.) India
Khan Darkhshan Irfana
Research Scholar NIMS University, Jaipur, Rajasthan
ABSTRACT
In India about 90 per cent of wheat is consumed in the form of chapattis and 10 per cent as
bread, biscuits, buns and other bakery products. The bread and biscuits manufacturing in India is
reserved for small scale sector. The production of bread in both organized and unorganized sectors
is estimated to be 14 lack tones and 10 lacks respectively. Out of total biscuits manufactured in
India, nearly, one third is in organized sector and remaining two thirds in the small and unorganized
sector. The study was undertaken in the year 2009-10 & 2010-11. Multistage sampling design was
adopted for selection of city, areas and the quality products i.e. yeast leavened and flour
confectionery the appropriate statistical technique was used to draw the valid inferences like
Tabular analysis, frequency, standard error, standard deviation, coefficient of variation and
percentage method were used to analyse the data Result revealed that the cost of raw material
utilized in production at different size of bakery firm industry viz. small, medium and large, were
RS.5.95, 14.30, 30.30 lakh where as expenditure incurred on fixed cost was Rs. 0.59, 2.43 and 3.46
lakh respectively and variable cost contribute to small, medium and large firm were Rs. 6.72, 8.41
and 36.82 lakh. In case of flour confectionary product result revealed that the cost of raw material
used in production at different size of bakery industry viz. small, medium and large were Rs. 9.83,
26.46 and 62.80 lakh respectively.
INTRODUCTION
Bakery industry is one of the largest
organized food industry in India. The bread
constitutes along 50 per cent of the total bakery
product and it is equally popular in urban and rural
region. This industry has traditionally been and
largely continues to be in the un-organized sector
which accounts for about 213 of its production
capacity. Present size of bread industry in India is
estimated at 1.2 million tones, which in term of
money amounts to Rs. 750 crores. Even at this level
of production, the per capita consumption of bread
in our country as low as 6 slices per person per year
(Sanjeev Chowdhry, 1990).
The Indian bakery industry is dominated by
the small scale sector with an estimated 50,000
small and medium-size producers, along with 15
units in the organized sector. Baking product is
gaining popularity as processed foods size of its
strong rural base. Baking products are their
availability ready to eat convenience and
comparatively good shelf life. The term baking
strictly refers only to the operation of heating
dough products in an oven. Baking is a heating
includes (i) evolution and expansion of gases; (ii)
coagulation of gluten and egg and gelatinization of
starch; (iii) partial dehydration from evaporation of
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146
water; (iv) development of flavours: (v) changes of
colour due to Maillard browning reactions bet\veen
milk, gluten and egg proteins with reducing sugars,
as well as other chemical colour changes~ (vi) crust
formulation from sugar dehydration and (vii) crust
darkening from Maillard browning reactions and
caramalization of sugars. The term 'baked product'
is applied to a wide range of food products,
including breads, cakes, pastries, cookies and
crackers
In India about 90 per cent of wheat is
consumed in the form of chapattis and 10 per cent
as bread, biscuits, buns and other bakery products.
The bread and biscuits manufacturing in India is
reserved for small scale sector. The production of
bread in both organized and unorganized sectors is
estimated to be 14 lack tones and 10 lacks
respectively. Out of total biscuits manufactured in
India, nearly, one third is in organized sector and
remaining two thirds in the small and unorganized
sector.
Bakery and Confectionery industries played
an important role in the early stages of
industrialization and development through their
backward and forward linkages besides the direct
impact they have on employment and rural
development.
ISSN: 2249-7846 (Online)
Khan Darkhshan Irfana
In India, agro-food processing is particular
have recently added significance with the setting
up of separate Ministry of Food Processing
Industries. It was after this that there has been
renewed interest in food processing industries by
the
academicians,
policy
makers
and
administrators.
MATHERIAL AND METHODS
SAMPLING DESIGN
Multistage sampling design was adopted
for selection of city, areas and the quality products
i.e. yeast leavened and flour confectionery In the
first stage, two district viz. Aurangabad and
Parbhani city was selected for present study
because of higher number of bakery and
confectionery firms. In the second stage, 15 areas
were selected from each city on the basis of highest
numbers of bakery and confectionery firms. In the
third stage, from selected areas Ninety bakery and
confectionery firms were selected on the basis of
highest numbers of bakery and confectionery firms
in Aurangabad and Parbhani city. Detail
information about the physical quantities of inputs
namely raw materials like Maida, ghee, sugar, milk
powder, baker’s yeast, baking powder, water GMS,
Energy/fuel, etc. and the output produced namely
breads, biscuits, cakes, toasts, khari, samosa and
their costs, returns and profitability was calculated.
Tabular analysis, frequency, standard error,
standard deviation, coefficient of variation and
correlation coefficient and percentage method
were used to analyse the data in present study.
Coefficient of variation
Coefficient of variation (C.V.) used to
measure the comparative variations of socioeconomic characteristics. Standard deviation does
not give proper idea about variation. To know the
dispersion the standard deviation and coefficient of
variation were estimated with the following
formulae.
Σ (Y-Y)2
S.D. =
(n-1)
Standard Deviation measures the dispersion between the observations.
S.D.
C.V. =
x 100
Mean
Coefficient of variation is the ratio of
standard deviation to mean expressed in terms of
percentage.
Tabular analysis
Tabular analysis comprised of arithmetic
mean, percentage and ratio. This method was used
to determine the costs, returns and profitability per
hectare.
Break-even analysis
Break-even point is the point where
minimum quantity is defined for processing to
justify an establishment cost of industries or
minimum quantity of processing required to cover
the fixed cost.
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147
Break-even point is the concept of no
loss no profit on the fixed and variable cost
considering when the factory is operating at the
different percentage of crushing capacity. Due to
various reasons, the crushing capacity is not
attained and thus, the level at which percentage
capacity of the factory is not put to loss can be
identified and care can be taken to attain this level
of minimum crushing to sustain the factory
functioning.
If the factory is operating above breakeven point, the factory condition is treated as
satisfactory and the effort should be made to attain
the highest level of efficiency. It also implies that
where the trouble lies and how this can be
eliminated.
ISSN: 2249-7846 (Online)
Science Research Reporter 2(2):146-151, April 2012
ISSN: 2249-2321 (Print)
Despite efficient functioning of the Purna co- sugarcane during the period from 2003-04 to 2007operative sugar factory an attempt was made to 08, by using following formula.
estimate break-even volume of processing
Fc
BEP =
PS - VC
Where,
BEP = Volume of business or break-even point (ton)
FC = Total annual fixed cost (Rs. In lack)
PS
= Selling price / ton or receipt realized Rs. / ton
VC = Variable cost Rs./ ton
RESULTS
Cost of production of yeast leavened product on
the basis of size of bakery industry.
The cost of production of yeast leavened
products was analysed on the basis of size of
bakery industry are presented in table 1. Table
revealed that the cost of raw material utilized in
production at different size of bakery firm industry
viz. small, medium and large, were RS.5.95, 14.30,
30.30 lakh where as expenditure incurred on fixed
cost was Rs.0.59, 2.43 and 3.46 lakh respectively
and variable cost contribute to small, medium and
large firm were Rs. 6.72, 8.41 and 36.82 lakh.
Amongst the various items of expenditure
in the production of yeast leavened bakery product
the highest cost incurred was observed on the use
of maida. The proportion of expenditure on these
items of total cost was 37.08 lakh followed by ghee,
sugar, yeast, bread improver, milk powder and salt
i.e. 5.37, 3.72, 2.94, 0.42, 0.33 and 0.24 lakh,
respectively.
The profitability of yeast leavened product
(YLP) was estimated and presented in table 4.7, it
was seen that yeast leavened product (YLP) at
small, medium and large firms were Rs.7.31, 20.84,
40.28 lakh, respectively. The gross return was
accounted i.e. Rs.8.16, 23.55 and 48.03 lakh rupees
respectively and the net profit worked out on
variable cost i.e. Rs. 0.86, 2.50, 7.878 lakh in small,
medium and large firm, respectively. The cost per
quintal of YLP was analyzed and recorded on basis
of before baking and after baking were 3042, 3624,
3235 and Rs.2503, 2965, 2657 in small, medium
and large bakery industry (firm), respectively. The
output input ratio was observed in the different
size of firm was 1:1.12, 1:1.13, 1:1.90, respectively.
Breakeven point was calculated to yeast leav end
product industry. It was observed that BEP in
small, medium and large unit i.e. 15.71, 49.99 and
175.27 point. It was in profit or in loss if running
below the BEP point it considered in loss and if the
running of unit above BEP the unit earning profit.
So BEP highly essential to know the position of unit.
Table 1: Per annum cost of production of profitability of yeast leavened bakery products.
Sr.
No.
1
2
3
4
5
6
7
8
9
10.
11.
Parameters
Small
Medium
Large
Physical output (Q)
Cost of raw material
Fixed cost
Variable cost
Total cost
Gross returns
Net profit on variable cost
Per quintal cost after baking
Per quintal cost before baking
Output Input ratio
Breakeven point
240
5.95
0.59
6.72
7.31
8.16
0.86
2503
3042
1:1.12
15.71
575
14.30
2.43
18.41
20.84
23.55
2.50
2965
3624
1:1.13
49.99
1245
30.30
3.46
36.82
40.28
48.03
7.78
2657
3235
1:1.19
175.27
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ISSN: 2249-7846 (Online)
Khan Darkhshan Irfana
Table 2: Per annum cost of production of profitability of flour confectionery products.
Sr.
No.
Parameters
Small
Medium
Large
1
Physical output (Q)
172
625
1443
2
Cost of raw material
9.83
28.46
62.80
3
Fixed cost
0.97
4.50
7.20
4
Variable cost
11.10
34.07
76.58
5
Total cost
12.09
38.57
83.78
6
Gross returns
13.51
66.59
100.20
7
Net profit on variable cost
2.41
32.52
23.62
8
Per quintal cost after baking
6830
6428
5806
9
Per quintal cost before baking
5122
48212
4357
10
Output Input ratio
1:1.2
1:1.7
1:1.2
11
Breakeven point
117.00
100.40
633.00
Cost of production of flour confectionery product
on the basis of size of bakery industry:
The cost of production of flour
confectionery product was calculated on the basis
of size of bakery industry are presented in Table 2
Table revealed that the cost of raw material used in
production at different size of bakery industry viz.
small, medium and large were Rs. 9.83, 26.46 and
62.80 lakh respectively. The highest fixed cost was
observed in large bakery firm RS. 7.20 lakh followed
by 4.40 and 0.97 lakh in medium and small firm
where as the variable cost contributes in the
production of various products. The highest cost
observed in large firm 76.58 lakh followed by
medium and small i.e. 34.07 and 11.10 lakh.
Amongst the various item of expenditure
maida rank get first position i.e. 2,16, 5.85 and
14.04 lakh rupees, in small, medium and large fir,
next ingredients items of costs are sugar, oil/ghee,
egg, cake gel and baking powder were utilized at
overall level that are 36.75, 15.92, 2.12, 0.88 and
0.31 quintals respectively and small quantity of
colour and essence etc. utilized.
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The profitability of flour confectionery
product (FCP) was analyzed and+9 presented in
table 4.8, it was seen that flour confectionery
products total cost was small, medium and large
firms i.e. Rs.12.09, 38.57 and 83.78 lakh
respectively. Whereas the gross returns was 13.51,
66.59 and 100.20 lakh rupees respectively.
The cost per quintal of FEP and the net
profit worked out on variable cost i.e. Rs.1.41, 4.63
and 16.15 lakh in small, medium and large firm
respectively. The cost per quintal of FCP was
estimated and recorded on the basis of before
baking and after baking was Rs.5122, 4821, 4357
and 6830, 6428, 5806 in small, medium and large
firm, respectively. The input output ratio was found
in the different size of firm was 1:1.2, 1:1.7, 1:1.2,
respectively .Break even point was estimated on
small, medium, large firm i.e. 117,100.40 and 633
point respectively. If the production is less than the
BEP the unit is running in loss and if more than BEP
it is in profit.
ISSN: 2249-7846 (Online)
Science Research Reporter 2(2): 146-151, April 2012
ISSN: 2249-2321 (Print)
Table 3: Per annum output produce in bakery firm (Parbhani) (unit/firm)
Particular
Unit
Group of bakery firm
Small
I
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
II
A.
13.
14.
15.
B.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Baked products
Bread
Toast
Buns
Pav
Rolls
Khari
Samosa
Pizza
Burger
Puff (non veg.)
Puff (veg.)
Doughnuts
Total baked products
Flour confectionery
Biscuits
Sweet biscuits
Salty biscuits
Cream biscuits
Cake (plane)
Chocolate cake
Veg. cake
Non-veg cake
Cup cake
Pastry
Coconut cookies
Nan khatai
Vanilla biscuit
Plum cake sponge
Fruit cake
Peanut biscuits
Total confectionery
products
q
q
q
q
q
q
q
q
q
q
q
q
q
40.00
15.00
10.00
15.00
5.00
10.00
20.00
5.00
5.00
5.00
10.00
50.00
145.00
Medium
180.00
350.00
30.00
30.00
10.00
30.00
10.00
15.00
15.00
5.00
30.00
15.00
390.00
Overall
Large
400.00
75.00
100.00
135.00
30.00
60.00
25.00
15.00
60.00
10.00
60.00
75.00
990.00
206.66
41.66
46.66
60.00
15.00
33.33
18.33
11.66
26.66
6.66
33.33
46.66
494.00
-
q
q
q
q
q
q
q
q
q
q
q
q
q
q
q
10.70
11.05
0.35
0.54
0.54
0.42
0.42
1.20
1.40
11.96
11.40
0.63
0.30
0.60
0.35
247.00
24.20
25.60
12.10
14.20
21.20
11.20
11.20
11.20
24.90
25.25
25.60
11.05
11.20
11.20
11.40
748.00
90.00
75.00
50.00
70.00
50.00
30.00
30.00
30.00
50.00
75.00
50.00
20.00
30.00
27.00
20.00
1568.00
41.63
37.20
20.81
28.15
23.91
13.87
13.87
40.80
20.81
37.40
29.00
7.25
13.83
12.93
10.58
854.00
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Krishnappa KG, 2002. Energy consumption pattern for processing of bread. Indian Food Industry, 1(3): 4346.
Asmatoddin, 2008. Study on capital involvement of bakery and confectionery units in Parbhani city.
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